My mother claims she taught me to read at 3 using the newspaper. I don't remember that, but I do remember very vividly reading small chapter books in kindergarten and I was 5 and I remember sitting on the teacher's knee and reading the story at story time to the class. It wasn't memorization, it was a different book each day.
Most 3 year olds don't read. Just like most people don't do a lot of things. I think what gets people's goats, for lack of a better term, is the comparisons, the embellishment to keep up with parent X. You know, if Johnny' s mon says he was reading at 3, then Billy's mom claims the same thing, blah, blah. Which I never understood because kids do things at different times and it kinda comes out in the wash at the end. Like alking, my oldest walked at 7 months, my middle one at a year old and my youngest took his time and waited until he was about 15 months. They're 32, 29 and 27 now and they all walk just fine. ;)